---
title: "Total Interest Income: definition, formula, and thresholds"
description: "Total interest income is all the interest and fees a bank earns on its earning assets (loans, leases, and securities) before subtracting funding costs. It is the gross top line of the spread business."
canonical_url: https://www.bankregreports.com/glossary/total-interest-income/
source: BankRegReports
category: "Income & Expense"
units: "$"
schedule: "Schedule RI"
---

# Total Interest Income

> Total interest income is all the interest and fees a bank earns on its earning assets (loans, leases, and securities) before subtracting funding costs. It is the gross top line of the spread business.

## Formula

```
Total Interest Income = Interest & Fees on Loans + Interest on Securities + Interest on Other Earning Assets
```

Schedule RI sums interest and fee income from each earning-asset category. Dividing total interest income by average earning assets gives the yield on earning assets; subtracting total interest expense gives net interest income.

## Why it matters

Interest income is the larger half of the spread equation and the most rate-sensitive revenue line. How quickly it reprices when rates change (relative to funding costs) determines whether a bank is asset- or liability-sensitive.

## How to read it

Track interest income with the yield on earning assets and the rate cycle. Rising interest income is only good if it outpaces rising interest expense; a bank whose asset yields lag its deposit costs sees net interest income compress even as gross interest income climbs.

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| Repricing with rates | Strong | Asset yields keeping pace with or beating funding costs. |
| Stable | Adequate | Interest income steady through the cycle. |
| Lagging funding costs | Watch | Yields slow to reprice while deposit costs rise. |
| Falling | Concern | Declining asset yields squeezing the spread. |


## Worked example

A bank with $1.8 billion of average earning assets yielding 5.0% generates roughly $90 million of total interest income a year. If it pays $27 million in interest expense, its net interest income is about $63 million.

## Questions

### Does interest income include loan fees?

Yes. Interest and fees on loans are reported together on Schedule RI. Origination and certain other fees that are part of the loan's yield are included in interest income.

### What is the difference between interest income and net interest income?

Interest income is the gross amount earned on assets. Net interest income subtracts the interest paid on deposits and borrowings, leaving the spread the bank actually keeps.

## Sources

- [FFIEC Call Report Schedule RI (Income Statement)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)

## Related metrics

- [Net Interest Income](https://www.bankregreports.com/glossary/net-interest-income/): Net interest income (NII) is the difference between the interest a bank earns on loans and securities and the interest it pays on deposits and borrowings. It is the core profit engine of traditional banking and the numerator behind net interest margin.
- [Yield on Earning Assets](https://www.bankregreports.com/glossary/yield-earning-assets/): Yield on Earning Assets measures gross interest income as a percentage of average earning assets. It is the asset-side input to net interest margin, the bank's gross interest rate.
- [Total Interest Expense](https://www.bankregreports.com/glossary/total-interest-expense/): Total interest expense is everything a bank pays for its funding, interest on deposits and on borrowings. It is the cost side of the spread business and the line that surges fastest when rates rise.
- [Net Interest Spread](https://www.bankregreports.com/glossary/net-interest-spread/): Net interest spread is the difference between the average yield a bank earns on its assets and the average rate it pays on its funding. It isolates pure pricing power, separate from the free-funding benefit captured by net interest margin.

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